The Road to Prosperity: Step 4 Live Below your Means

Like my other posts, the 4th step on the “Road to Prosperity” is not new or a “Quick Fix” but instead is time-tested and wisdom from generations of prosperous families and individuals throughout the ages. All of us have heard stories of celebrities and lottery winners that have wound up broke and worse off from lack of proper money and lifestyle management. To a lessor extent, our neighbours that try to “keep up with the Jones” often find themselves up to their eyeballs in debt and stressed out. A prime example here in Canada are those hoards of Hockey parents spending thousands of dollars each year on their children for fees, equipment and travel. Many say they are doing it for the kids, but if you’ve ever hung out with Hockey parents its more often than not about the social aspect of the group. Many parents don’t know what to do with themselves once the kids choose not to play sports anymore or simply outgrow or don’t make the cut any longer. Parents often come to me with stories of how they blew 50k or more on organized sports with nothing to show for it but a burnt out mini van and a large line of credit.

To truly build wealth we must look at not just what we are doing or making in our careers, but how we are living our lives. It’s easy for governments to print money because there is no individual accountability to pay it back. They just tack it on to future generations’ tax bill and carry on. You and I live in the real world where we have to balance what comes in with what goes out. If we’re spending more than we’re making trouble is not far behind. In these situations the main culprit is “Lifestyle”. Keeping up appearances and a façade can only go on so long. Better to have a smaller house, older car and better family cohesion than to worry about maintaining all of the above.

Learn to live well. Don’t worry about what everyone else has. Appreciate what you have. Think about what you need versus what you want and watch your wealth grow.

Take care and till next Step,

Rick Barbosa

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rickbarbosa

Our Senior Partner Rick Barbosa is a Professional Accountant and Personal Financial Advisor with over 20 years experience dealing with Large Fortune 500 Organizations and Small to Medium sized Family owned Businesses. If you're looking for help with your finances, taxes, investing or starting and managing a business you've come to the right person.
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